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May 2014 - Hometrack National House Price Survey

On 30 May, 2014

House prices increased 0.5% in May – 0.1% lower than the rise seen in the previous two months and 0.2% lower than February 2014. The coverage of postcode districts with price increases over the month slipped from 50% in March and April to 42% in May. The coverage of price increases fell back both in London and the rest of the country.

A lack of supply continues to support pricing levels but the growth in demand is also starting to moderate.

While house prices continue to rise in London, there has been a continued slowdown in the rate of growth with prices up 0.6% in May, versus an average increase of 0.8% per month over the last 6 months. In London the impetus for growth is emanating out of the lower value markets which offer better value for money. In central London prices were up just 0.2% in May.

The time on the market averages 6.5 weeks, up slightly on April 2014 (6.3 weeks). The proportion of the asking price achieved is starting to plateau as the market starts to resist higher prices and currently averages 96.8% - the highest level since September 2002.

Hometrack housing survey indicates start of a slowdown in house price growth.

LONDON, 30 MAY 2014: Hometrack - the residential property analyst - has identified a slowdown in the escalating growth of house prices across in May, in its monthly national housing survey.

Commenting on the results of Hometrack’s May National Housing Survey, Richard Donnell Director of Research at Hometrack said:

“House price inflation is starting to moderate both in London and nationally. The proportion of postcode districts with price increases slipped from 50% to 42% of market in May. This led to a slowdown in overall house price growth, with prices increasing by 0.5% in May, compared to 0.6% growth in both April and March. Signs of this slowdown in momentum were present in Hometrack’s monthly national housing survey in April, where we identified early signs of growing price resistance on the part of buyers in London.

Time on the market (weeks, 3mma)Source: Hometrack National Housing Market Survey

Strong price increases, widespread talk of a possible housing bubble and recent warnings from the Bank of England on house price inflation are starting to test the resolve of buyers. London has led the recovery but the impetus for growth is emanating out of the lower value parts of the London market. In Central London house price growth has slowed significantly in the last year and was just 0.2% in May.

As the recovery spreads from London across the country house price inflation will be driven by mortgage reliant demand which is a key area of concern for the Bank of England. The implementation of the Mortgage Market Review (MMR) looks to be perfectly timed as stronger affordability checks will limit the ability of households to get ‘carried away’ by talk of housing recovery. There are already signs of slower activity in the mortgage market and we expect to see further signs of slowing house price momentum in the months ahead. ”

Download the PDF to view full results of the May survey.

Supply demand balance leads price changes by 3 months

Percentage of asking price being achieved (%, 3mma)

Hometrack’s national monthly housing market survey is based on a monthly survey of estate agents and surveyors across all postcode districts across England and Wales.

May 2014 - Hometrack National House Price Survey

Rental growth has varied widely over the last decade from flat to growth of over 45%. Rental affordability is the most stretched in London while in the regions the affordability of renting is the best for a decade.

The housing market has been at the centre of a storm in recent years. From rent cuts for housing associations, to extending the Help to Buy scheme, and tax changes aimed at curbing investor demand, all types of organisations have had to react to a plethora of policy changes.